Thousands march in Germany over unemployment fears

"Politicians must know that there is a serious risk of social unrest in Germany because of the worries about jobs," said Kaiser, 63.

Earlier this year, Volkswagen switched to a short working week for the first time in 26 years, with scaled-back production at six plants in western Germany and one plant in eastern Germany affecting 61,000 workers.

Many German workers are angry a crisis they see as being rooted in the excesses of capitalism now threatens their jobs.

"Capitalism: its time is over," read one banner.

Close to 300,000 jobs have now been lost in Germany since the collapse of U.S. investment bank Lehman Brothers in September set off a new wave of financial and economic turmoil.

The global economic downturn has sapped foreign demand for German goods, sending the export-orientated economy into a deep recession. The government expects the economy to contract by 6 percent this year, and for unemployment to rise into 2010.

To combat the recession, the government has launched twin economic stimulus packages it says are worth a combined 71 billion pounds. One protest organiser called for a third such package, but Muentefering dismissed the idea.

"There will be no third stimulus package," he said.

(Writing by Paul Carrel)